Can I take Sec 179 for heat pump for our residential rental property? Turbo Tax calculated as 179 but IRS publ says that's for non-residential property.

Forum|Forum|3 years ago
April 6, 2023
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This is for a residential rental property that we rent 100%. We needed to purchase a new heat pump. If we can't take Sec 179, are there other special deductions we can take for it?

TurboTax Online

RobertB4444

As long as you have active participation in the rental property then you qualify for the 179 deduction and can take it.

@helene-dalton

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helene-daltonAuthor

Thank you for the info. I was looking at IRS pub 946 and it says qualified sec 179 real property is for nonresidential. Also I saw on the TurboTax forum that there’s an issue with TurboTax putting residential real property as 179 in error. Where do you show that rental properties can take 179 deduction?

AliciaP1

Active participation in the rental property means you treat the property like a business and it is not passive income. If the residential rental property is reported on Schedule E of your personal return, it is passive income. If it is reported as a business on Form 1040 Schedule C or Form 8825 attached to Form 1065 or Form 1120S, it is considered a business, and the improvement assets, like the replaced heat pump, are eligible.

@helene-dalton

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